1. Taxation Institute of Chartered Accountants Bangladesh
Md. Shakhawat Hossain
Articled Student
Howladar Yunus & Co.

2. Income from other source
Topic List
Reference
Introduction
Dividend
Interest Income other than Interest on Securities
Income from Letting of Assets
Deemed Income under different sub-sections of Section 19
Allowable Deductions
Inadmissible Deductions
Illustrations for practice

3. Income from Other Source
Reference
Definition: 2(26), 2(31), 2(56)
Sections: 33, 34, 35, 36, 19(1)-19(5), 19(8)- 19(13), 19(21), 19(21B), 19(24), 19(26), 19(27), 19(28)

4. Income from Other Source
Introduction
This is the residuary head of income as mentioned in Section 20 of the Income Tax Ordinance 1984.
Categories
Particulars
References
Specified Income
Dividend, interest, royalties, fees for technical services, income from letting of specified assets
Section 33 (a), (b) and (c)
Deemed income
Income as specified in different subsections of section 19
Section 33(d), Section 19(1), (2), (3), (4), (5), (8), (9), (10), (11), (12), (13), (21), (21A) and (24).
Residual income
Any income that is not classified as income in any other sections
Section 33 (e)

5. Income from Other Source
Dividend
Section 2(26) defines dividend
Exemption: Any income from dividend of a mutual fund or a unit fund is exempted up to Tk. 25,000 [Sixth schedule, Part A, Para 22A].
Tax Deducted at Sources: Tax on dividend income will be deducted at following rates:
Grossing up: Yes. However, it is important to know the rate of TDS before grossing up.
Type of Assessee
Residential Status
TDS Rates
Company
Both resident and non-resident
20%
Person other than Company
Resident and non-resident Bangladeshi
10%
Non-resident foreigner
25%

6. Income from Other Source
Interest Income other than Interest on Securities
Sources of Interest income
TDS rate
Exemption
Interest on Savings / Fixed deposits from a Bank, co-operative bank, non-banking financial institution, leasing company, housing finance company
10%
No exemption
Share of profit from any bank run on Islamic Principles.
Interest on Savings Certificates:
5 years Bangladesh Sanchayapatra
3 monthly profit based 3 year Bangladesh Sanchayapatra
Pensioner Sanchayapatra
Paribar Sanchayapatra 5%
Interest on Post Office Savings Bank
Interest on Wage Earner’s
Development Bond.

7. Income from Other Source
Interest Income other than Interest on Securities
Sources of Interest income
TDS rate
Exemption
Interest on Non-Resident Foreign
Currency Deposit Account
Nil
Fully exempted
Interest on DPS / Contributory Savings Scheme run by a commercial Bank and approved by the government.
Interest on Bangladesh Industrial
Development Bond
10%
Exempted up to Tk. 25,000. If the interest amount exceeds Tk. 25,000, 10% TDS is allowed on the whole interest amount and to be considered as the final payment of tax as per Section 82(c).
US Dollar Premium Bond
US Dollar Investment Bond

8. Income from Other Source
Income from Letting of Assets
Income from letting of machinery, plant or furniture belonging to the assessee and also building inseparable from the mentioned assets is taxable as income from other sources if the same is not chargeable to tax under the head “Income from Business or Profession under section 28” or under the head “Income from House Property under section 24”. In this case the letting does not constitute a business activity.

9. Income from Other Source
Deemed Income under different sub-sections of Section 19
Sectio n
Income to be shown under the head ‘Income from Other Sources’
19(1)
Unexplained credits
19(2)
Unexplained investments
19(3)
Unexplained expenditure
19(4)
Unrecorded investments
19(5)
Unrecorded money, jewellery etc.
19(8)
Purchase of assets at a price lower than the fair market value
19(9)
Salami or premium for granting leases
19(10)
Goodwill money or compensation
19(27)
Purchase or hire of car at a price exceeding 10% of paid up capital

10. Income from Other Source
Deemed Income under different sub-sections of Section 19
19(11)
Benefit or advantage on account of cancellation of indebtedness
19(12)
Managing agency commission
19(13)
Winning from lotteries, crossword prizes etc.
19(21)
Unpaid loan
19(21A)
Loan or gift received under some circumstances
19(21B)
Transfer of initial capital
19(24)
Disclosing investment in equity of an unlisted company
19(26)
Loan taken by a company otherwise than by a crossed check or bank transfer

11. Income from Other Source
Allowable Deductions
As per section 34, followings are the allowable deductions from the income classifiable as income from other sources as per section 33.
Interest paid on money borrowed for the purpose of acquisition of shares of a company. Interest payable outside Bangladesh on which tax has not been paid and from which tax has not been deducted at source shall not however be admissible deduction.
Any expenditure, not being capital expenditure or personal expenses, spent solely for the purpose of making or earning the relevant income.
Where income from other sources is derived from letting on hire any machinery, plant or furniture is inseparable with buildings, allowance for repairs, insurance premium, depreciation and obsolescence allowance are admissible in the determination of income from business under section 29(1) (vi), 29(1) (vii), and 29(1) (xi), respectively as if the income from such letting on hire were income from business or profession.
Provided that the provisions of section 19 (16) shall also be applicable for the determination of any profits where the sale proceeds of such machinery, plants, furniture or building exceeds the written down value thereof.

12. Income from Other Source
Inadmissible Deductions
As per section 34(4), following two expenses are not admissible:
Any interest chargeable under the Ordinance which is payable outside Bangladesh on which tax has not been paid and from which tax has not been deducted at source under section 56; or
Any payment which is chargeable under the head “Salaries” if tax has not been paid thereon or deducted there from under section 50.

13. Illustrations for practice
Income from Other Source
Illustrations for practice
Study Manual_Taxation-I (ICAB)- Page:
Study Manual_Taxation-II (ICAB)- Page:
Bangladesh Income Tax_ Nikhil Chandra Shil- Chapter -12_Page:
Previous Questions of ICAB_ Professional Stage KL

14. Thanks Howladar Yunus & Co. Md. Shakhawat Hossain Articled Student
Taxation & Legal Compliance Department